New job creation slows down in Gulf countries

News Report
Foreign workers are passing hard times in getting job in the Gulf countries against the backdrop of political tension in the middle-east countries, budget cut in mega projects, economic slowdown and policy of recruiting local manpower in the oil producing countries.
Oman and Saudi Arab continue to face tough situation with the sultanate's job market growth prospects set at two per cent, while Saudi facing two per cent reduction, according to news agencies.
The results are based on GulfTalent's survey of over 1,100 CEOs and executive managers of firms across the six-member Gulf Cooperation Council, conducted in February-March 2018.
The biggest factor driving employment growth is the recent rise in oil prices and resulting upturn in business optimism. The price of crude oil, which had been in the US$30-50 range for much of 2016 and 2017, has been averaging over US$60 in the past six months.
Kuwait is set to have one of the fastest rates of job creation, with a net 18 per cent of firms increasing headcount. The country, with the region's highest dependence on the oil and gas sector, is witnessing a boom thanks to higher oil prices. According to the IMF, it is expected to have the region's fastest economic growth this year.
In the UAE, a net 13 per cent of firms are reporting an increase in personnel, driven by a recovering oil sector in Abu Dhabi as well as growth in Dubai's non-oil sector, including the impact of infrastructure spending for Expo 2020.
The Saudi job market is shrinking this year, with a net two per cent of firms reporting a reduction in headcount, mainly due to the government's enforcement of stringent Saudisation policies. While the policy has boosted employment opportunities for Saudis, some firms are seeking to achieve mandatory Saudisation ratios by simply reducing their expatriate workers. Overall, more expats are leaving the job market than the Saudis being hired.
Job growth in Oman at two per cent has been similarly weak. Limited oil reserves have curbed the upside of oil price recovery, while strict Omanisation policies are limiting companies' ability to hire expatriates.
Following substantial downsizing over the last three years, the oil and gas sector is now witnessing the region's fastest headcount expansion, with a net 39 per cent of firms expanding their workforces to take advantage of new projects and business opportunities.
The healthcare sector also continues to expand, thanks to a growing domestic population and a regulatory push to increase health coverage. Banking is another sector witnessing a healthy growth, as the improving macroeconomic environment translates to increased demand for credit and higher lending appetites of financial institutions.
Construction continues to underperform, with very few firms growing headcount. While improving business sentiment and infrastructure investment in the region are favourable factors, payment delays are posing serious cash flow challenges for construction firms.
FMCG is another weak sector, registering only six per cent growth. Consumer demand in the region has taken a hit from the introduction of Value Added Tax (VAT) in the UAE and Saudi Arabia, excise taxes on certain goods such as carbonated drinks, reduced subsidies hitting disposable incomes, and the declining expatriate population in some countries.
In terms of demand for skills, the largest upsurge is for finance professionals, thanks to the introduction of VAT and the need to update finance processes and systems. Demand for human resource professionals ranks second as companies seek to re-build HR teams that were drastically reduced over the last three years.
Marketing professionals are also in demand as companies fight for customers in an increasingly competitive marketplace.
The Gulf job market is set to grow at an average rate of nine per cent this year, according to research conducted by GulfTalent, one of the region's leading online recruitment portals.
As the labour market is squeezing in the middle-east countries, the government should explore new markets in other countries, said a Bangladesh Association of International Recruiting Agencies (Baira) official.
Bangladesh exported 614,585 workers to various counties during the January-October period in 2018 with KSA holding top destination for manpower export with 206,768 workers, followed by Malaysia with 155,558 workers, Qatar with 63,344 workers and Oman with 60,199 workers, according to Bureau of Manpower and Employment and Training (BMET). In 2017, Bangladesh sent 1008,525 workers as against 555,881 workers sent in 2016.
The present trend shows that manpower export this year may drop by 15-20 per cent as middle-east countries are going through economic turmoil, said the official of the Bureau of Manpower and Employment and Training (BMET) and Bangladesh Association of International Recruiting Agencies (BAIRA) said.
Bangladesh manpower export market may suffer this year against the backdrop of political tension in the middle-east countries, budget cut in mega projects, economic slowdown and policy of recruiting local manpower in the oil producing countries, sources said. Meanwhile, economic growth in the energy-rich Gulf will recover in 2018 from a contraction last year but remains vulnerable to volatility in crude oil prices, the IMF forecast on Tuesday.
The global lender predicted that an overall energy price recovery from 2015-2016 lows would spur the economies of the six-nation Gulf Cooperation Council to grow by 2.4 percent in 2018 and 3.0 percent in 2019, after a contraction of 0.4 percent last year. Grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, the GCC states together pump over 17 million barrels per day and depend heavily on crude revenues. Expatriate Bangladeshis sent 13,526.84 million US dollars in 2017, 13,609.77 million US dollars in 2016 and 15,270.99 million US dollars in 2015 home Expatriate Bangladeshis sent 11,877.42 million US dollars home during the January-September period of the current calendar year, according to Bureau of Manpower and Employment and Training (BMET).